Sanyo to spin off loss-making chip unit

Sanyo to spin off loss-making chip unit

Semi-conductor unit 'better off on its own'

Sanyo Electronics has confirmed plans to spin off its loss-making semiconductor division in July as part of its restructuring moves.

Japan's third-largest consumer electronics firm said that the sale of the semi-conductor unit is necessary as it never fully recovered from the damage caused by the 2004 earthquake in Japan.

Sanyo also believes that the semi-conductor unit would be more competitive as a separate entity.

At the end of last March, Sanyo's chip business employed 17,000 workers and generated 220bn yen ($1.87bn) in sales, or about 10 per cent of group revenues. The company has since been cutting jobs and production in the division.

Sanyo embarked on a huge restructuring plan last year, stating that it aimed to cut 15 per cent of its group workforce, close factories, halve its debt and streamline unprofitable business areas.

Recently, Sanyo has formed alliances with Nokia in mobile phones and Quanta Computer in flat TVs to help boost earnings.